Thai Prime Minister Thaksin Shinawatra, battling a growing campaign to oust him, gave his first indication yesterday that stepping aside temporarily to defuse the crisis was an option.

But he also indicated that he was not yet ready to accept a suggestion to have him name one of his deputies as caretaker prime minister while political reforms demanded by the opposition were thrashed out.

"It is a good suggestion," Thaksin said during a campaign stop in the northeast for a snap election he called for April 2. The three main opposition parties are boycotting the poll, saying it cannot be fair with him in charge.

But then he added in response to a question: "No, I haven't thought of taking a break."

"I hope this is not something you had already written before you came to put these words in my mouth," he told reporters.

"I consider all ideas which people raise," Thaksin said.

"I will disclose my decision only when the time is right and the decision will be based on the benefit of the country, not influenced by the demands of those losers."

With thousands of protesters camped outside his office at Government House in central Bangkok and vowing to stay until he quits, Thaksin has offered to set up a neutral body to reform the constitution and hold another election within 15 months.

The opposition turned that down flat, saying no panel he appointed could be neutral.

Economic impact

Thaksin, accused of corruption and abuse of power by an extra-parliamentary coalition trying to oust him, said his staff had been in contact with all parties making suggestions to end the political turmoil he said was hurting the economy.

"Of course, it has an impact on the economy," Thaksin said after 100,000 protesters marched to his office on Tuesday morning following an all-night rally demanding that he quit. He has declared frequently he will not bow to "mob rule."

David Marshall, managing director of Asia financial institutions at Fitch Ratings, said the agency might have to cut its economic growth forecast if the crisis persisted.

"I think we probably won't do that if the political problems can be resolved within a matter of weeks, but if they persist for a month, it will have a negative impact on the economy and then we may have to take another look," he said.

Sriyan Pietersz, head of research at JPMorgan in Thailand said the crisis could put off foreign investors.

"If you are a sensible investor you want to know that the underlying conditions determining that investment will not change," he said.

Fears of violence have been rife since the anti-Thaksin campaign caught fire in late January following his family's tax-free US$1.9 billion sale of the business empire he founded to a Singapore state investment firm.

Thaksin said on Tuesday he would declare a state of emergency if the demonstrations got out of hand, an act that could bring troops onto the streets of a country with a long and relatively recent history of coups.

Military chiefs, however, said they saw no reason for an emergency decree at the moment.

The anti-Thaksin campaign has been peaceful so far, but there is fear that violence would erupt if thousands of government supporters travelling to Bangkok come near the Thaksin foes.

About 6,000 farmers with hundreds of trucks and tractors were heading down from the north and were expected to arrive on the outskirts of the capital later yesterday.

Police said they had persuaded the Thaksin supporters to stay away from Government House to avoid a potential confrontation.

Source: China Daily